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Abbey's new chief carves bank in two

TROUBLED Abbey National, Britain’s sixth-largest bank, will warn investors it could take three years to sell off or close down its wholesale banking, private-equity and other “toxic” foreign business units.

Luqman Arnold, the recently appointed chief executive, will next week announce plans in effect to split Abbey National in two, separating its healthy personal financial services division from the plethora of loss-making businesses built up under Ian Harley, the former chief executive.

Stephen Hester, finance director, will run the so-called portfolio business unit (PBU) over the next 36 months. Arnold will concentrate on managing the bank and personal financial services.

One person with knowledge of Arnold’s plans said: “The previous management spent most of its time expanding away from its core business, which is the bank and personal financial services business in the UK. The current team plans to change all that radically.”